Siburo company issued 300000 11 10-year bonds on january 1

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Siburo Company issued $300,000, 11%, 10-year bonds on January 1, 2011, for $318,694. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semi-annually on July 1 and January 1. Siburo uses the effective-interest method to amortize bond premium or discount.

Required:

Prepare the journal entries to record the following. (Round to the nearest dollar)

(a) The issuance of the bonds.

(b) The payment of interest and the premium amortization on July 1, 2011, assuming that interest was not accrued on June 30.

(c) The accrual of interest and the premium amortization on December 31, 2011.

Reference no: EM13390185

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